This
filing consists of a notice distributed August 5, 2009 to all On2 Technologies,
Inc. employees in the United States.
Frequently
Asked Questions for US Employees and Other Employees Subject to US
Policies
What is
the timing of the transaction?
* We
expect the transaction to close in Q4, but timing depends on, among other
things, the receipt of On2 stockholder approval, regulatory clearances and the
satisfaction of other conditions.
* Within
a few weeks after the announcement, Google will file a registration statement
with the SEC that includes a prospectus of Google and proxy statement of On2 in
connection with the transaction.
* We will
mail the proxy statement / prospectus to stockholders and hold a stockholders
meeting to vote on the transaction as promptly as practicable.
Will On2
operate as an independent company during the pendency of the
transaction?
* On2
will generally continue to operate in the ordinary course of business and as a
separate and independent company until the transaction closes, subject to
certain limitations in the merger agreement regarding specified types of
material transactions. Any contact between Google and any On2
employees during the pendency of the transaction must be approved by Matt Frost
or Tim Reusing.
Why is
Google interested in a transaction with On2?
* Google
has indicated to us that they are continually looking to improve video quality
and delivery on the web, and that our video technologies will allow them to do
even more with their products and initiatives. They have indicated that they are
interested in all parts of our video technology. With Google Video, Google Talk
and YouTube, among others, they have a substantial interest in developing tools
and technology that will better support more high quality video on the
Internet.
* Google
has indicated that they believe that our team and technology will help Google
make higher quality video available online. We believe that their
decision to engage in this transaction with us after an intensive review is
testament to every On2 employee's skill and hard work.
What are
the financial terms?
* Under
the terms of the agreement, each outstanding share of On2 common stock will be
converted into $0.60 worth of Google class A common stock in a stock-for-stock
transaction.
* The
number of shares of Google class A common stock to be received by On2
stockholders will be determined by dividing $0.60 per share by the volume
weighted average trading price of a share of Google class A common stock based
on the sales price of every share of Google class A common stock traded during
the twenty trading-day period ending on and including the second trading day
prior to the date of the meeting of On2's stockholders to consider and vote on
the merger agreement.
Are there
any conditions to the completion of the transaction?
* The
transaction will not be completed unless and until certain conditions are
satisfied, including the receipt of On2 stockholder approval, regulatory
clearances and the satisfaction of other conditions
What
happens to my On2 stock options and restricted stock? Will we get Google
options?
* All
vested and unvested options that have a strike price below $0.60 , as
well as unvested restricted shares, will vest and be exchanged for a certain
number of shares of Google under the terms of the acquisition
agreement.
* The
number of shares of Google you receive will be determined by dividing $0.60 per
share by the volume weighted average trading price of a share of Google class A
common stock based on the sales price of every share of Google class A common
stock traded during the twenty trading-day period ending on the second trading
day prior to the date of the meeting of On2's stockholders to consider and vote
on the transaction.
*
If you own any restricted shares that have vested, those shares will
be treated the same in the transaction as all other On2 common
stock.
* All
"out of the money" options (i.e., strike price of $0.60 and above) will be
cancelled.
* No
Google options will be granted to employees in connection with the
acquisition.
* If the
number of shares that you have does not add up to a single share of Google or
would result in the issuance of fractional shares of Google (e.g., 50 shares of
On2 does not equal a single share of Google), you will receive cash for your
shares or fractional shares.
What
about taxation of restricted stock and options?
* You are
advised to consult your own tax advisor regarding the tax treatment of your
restricted stock and options. Additional information regarding your
tax treatment will also be forthcoming in the proxy statement / prospectus for
the transaction.
How much
control will we have over our own daily operations after the transaction closes?
Will the company continue its current business model, i.e., licensing software
for revenue?
* That is
a decision that Google will make.
Will the
reporting structure change? Will I report to somebody in Mountain
View?
* That is
a decision that Google will make.
Will any
Google people move over to On2?
* That is
a decision that Google will make.
Does the
transaction include On2 Cambridge & On2 Oulu?
* Yes,
since they are both subsidiaries of On2.
If there
are staff reductions, how will Google decide who to keep?
* Google
has indicated to us that they consider this an acquisition of people as much as
technology. They have indicated that they intend to meet with every On2 employee
during the transition to learn about your skills and interests and determine if
there are opportunities for you at Google. Google does not expect that personnel
changes will occur during a two month evaluation period after the closing. You
will continue to earn 100% of your current salary during the two month
evaluation period.
* Google
has agreed that it will likely take at least two months after closing (i.e.,
after stockholders approve the transaction) to evaluate our employees before
making any decisions. If Google does not make you an offer, or if you reject an
offer, you will receive three months' severance pay unless terminated for
cause.
Additional
Information and Where to Find It
Google
plans to file with the Securities and Exchange Commission (the "SEC") a
Registration Statement on Form S-4 in connection with the transaction, which
will include a Proxy Statement of On2 that also constitutes a Prospectus of
Google. On2 will mail the Proxy Statement/Prospectus to its
stockholders in connection with the transaction. The Registration Statement and
the Proxy Statement/Prospectus will contain important information about Google,
On2, the transaction and related matters.
Investors and security holders are
urged to read the Registration Statement and the Proxy Statement/Prospectus
carefully when they are available.
Investors and security
holders will be able to obtain free copies of the Registration Statement and the
Proxy Statement/Prospectus and other documents filed with the SEC by Google and
On2 through the web site maintained by the SEC at www.sec.gov and by contacting
Google Investor Relations at +1-650-253-7663 or On2 Investor
Relations at +1-518-881-4299. In addition, investors and security
holders will be able to obtain free copies of the documents filed with the SEC
on Google's website at investor.google.com and on On2's website at
www.on2.com.
Participants
in the Solicitation
Google,
On2 and their respective directors and executive officers may be deemed to be
participants in the solicitation of proxies in respect of the proposed
transaction. Information regarding Google's executive officers
and directors is included in Google's definitive proxy statement, which was
filed with the SEC on March 24, 2009, and information regarding On2's executive
officers and directors is included in On2's definitive proxy statement, which
was filed with the SEC on April 7, 2009. The Proxy Statement / Prospectus for
the proposed transaction will provide more information about participants in the
solicitation of proxies from On2 stockholders, which participants may have
interests different from On2 stockholders generally. You can obtain
free copies of these documents from Google or On2 using the contact information
above.
Caution
Concerning Forward-Looking Statements
This
document includes certain forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995, including statements regarding
the expected timing of the acquisition, Google's and On2's ability to close the
acquisition, and the expected benefits of the acquisition. These statements are
based on the current expectations or beliefs of managements of Google Inc. and
On2 Technologies, Inc., and are subject to uncertainty and changes in
circumstances. Actual results may vary materially from those expressed or
implied by the statements herein due to (1) changes in economic, business,
competitive, technological and/or regulatory factors, (2) failure to receive the
required stockholder and regulatory approval for the acquisition, (3) failure to
compete successfully in this highly competitive and rapidly changing
marketplace, (4) failure to retain key employees, and (5) other factors
affecting the operation of the respective businesses of Google and On2. More
detailed information about these and other factors that may affect current
expectations may be found in filings by Google or On2, as applicable, with the
Securities and Exchange Commission, including their respective most recent
Annual Report on Form 10-K and Quarterly Report on Form 10-Q. Google and On2 are
under no obligation to, and expressly disclaim any such obligation to, update or
alter their respective forward-looking statements, whether as a result of new
information, future events, or otherwise.